How can the UK become a ‘world leader’ in Life Sciences?

UK drug manufacturing has dropped by a quarter since the start of this government and they are ambitious to promote the UK’s £60bn pharmaceutical sector as a fast growing industry! Official statistics show the UK has gone backwards in the business of making drugs, which in 2012 accounted for 26 per cent of pharma’s £60bn a year turnover. Spending on pharma research and development has also fallen from a peak of close to £5bn in 2011 to £4.1bn in 2013.

In 2011 the life sciences sector was high on the agenda of the government’s priority list in its attempt to rebalance the economy. The Prime Minister launched the “Strategy for Life Sciences“, which aims to improve collaboration with Industry and the NHS to support growth in the UK. Vince Cable, business secretary declared at the time that the UK should become a “world leader” in life sciences.

However, according to the Office for National Statistics, in 2013 UK became a net importer of medicinal and pharmaceutical products for the first time in 21st century, including the value of smuggled drugs. At the same time, the drug prescriptions by GPs have seen an 11 per cent increase since 2010. Industry experts can sum up several reasons for the decline in drug manufacturing and the upscale in drugs import over the past five years:

The expiration of patents on a range of high valued drugs, which has prompted big pharma companies to shift production to lower-cost countries.

The government had also been late to recognise the importance of drugs manufacturing. “Most incentives have gone to traditional nuts and bolts manufacturing,” reports a drug company executive.

The UK tax regime had not been as “user-friendly” as other countries, such as Ireland and Singapore.

The climate is changing and new investments into life sciences are announced alongside a review into drug development and medical technology. Minister for Life Sciences George Freeman said “NHS leadership in health research is attracting new investment into our life sciences research sector”. An example of this would be the launch of “The Innovative Medicines Review”, which hopefully speeds up patient access to cost-effective and innovative medicines and devices. The government is also supporting investment in life sciences through the ‘Biomedical Catalyst’ funding programme, which funds SME and academic-led projects with commercial potential. Innovate UK and the Medical Research Council (MRC) have already awarded £200 million to over 250 companies and universities, and gained a further £100 million in industry co-commitment.

In addition to this, a package of £63 million of new Industry investments had been announced in November of 2014 by several big players in the Pharma and Med Tech industry: MSD (Merck) is creating a new site in London and expanding R&D in Herts, whilst Becton, Dickinson and Company is building a new production line in Plymouth for £21 million. Pharma giants Astra Zeneca and GlaxoSmithKline had also recently announced new investments, indicating that the UK was once more becoming an attractive location for manufacturing.

According to Mr Cable, approximately £3.5bn in new investment had been announced since the government’s life sciences strategy was launched in 2011. “The global pharmaceutical sector is vitally important to the UK, and we’re taking concerted action to work with the industry to respond to the challenges it faces,” he said.

Does our government really do enough to get the life sciences sector back on track and booming since its peak in 2009? Or can they do more? As always, I am very interested in hearing your thoughts!

Norma Warwick-Smith is the Senior Consultant of Pharmaceuticals & Life Sciences at Interim Partners.

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